Let’s talk about value creation from a slightly different perspective today. Reputation and how it plays into and impacts value. I’m going to dive deeper into some of the things we’re doing beyond financial performance, to drive shareholder – and more broadly – stakeholder value. So, why do I care about the reputation and brand perspective of Dell Technologies? I care because it matters to our Investors, our Customers and to our Team Members.
We all know that reputation is fragile. One of the most notable investors in our lifetime, Warren Buffett, has counseled about this. “It takes 20 years to build a reputation and 5 minutes to ruin it. If you think about that, you’ll do things differently.”
Almost one year ago—as of Dec. 28—Dell Technologies returned to the public market. Since then, we’ve challenged ourselves to not only set the standard in the industry with our solutions and how we treat our customers, but we’ve also made it clear that we’re investing inside our walls, in our people, like never before.
At Dell Technologies, we look at reputation much the same way The Harris Poll does. For 20 years, they’ve ranked companies on reputation in areas of innovation, workplace, governance, citizenship, leadership, emotional appeal and financial strength. We are proud that we climbed 7 spots last year to No. 29 on the list.
Let’s revisit our journey from where we started … to today. A college student selling PCs out of his dorm room was only going to get repeat business by building positive word-of-mouth. Reputation. A startup was only going to hit the Fortune 500 in eight years because people knew they could get a better product in a better way. Reputation. A company can only transform from being thought of as a hardware provider to the essential information technology infrastructure partner because customers around the globe understand the vision. Reputation.
But reputation isn’t just about what we sell at Dell Technologies. It’s about who we are. It’s about our DNA. It’s about the people who drive our business. The people who see farther, dream bigger, work harder, and bring their whole, unique selves to work each and every day in 180 countries around the globe.
Each one of us at Dell Technologies has the opportunity to impact our reputation in different ways. For example, my job is driving our financial performance—and I believe that is a critical pillar of a strong corporate reputation.
An excellent reputation generates higher valuations and stock prices. We also know that there are a number of reports that indicate companies with a strong reputation are trusted more by investors, and therefore, garner higher prices if investors are confident there is less risk. Based on a recent study by Rivel, 91 percent of investment professionals believe transparency from management is a top contributor to company credibility. And, one-third believe companies focused on social impact outperform their less-committed competitors.
Bringing us full circle – you could easily take the liquidity, profitability and growth triangle we “numbers guys” love so much and flip it to a different view. Our success hinges on our reputation, financial strength and business strategy. I’m proud of our strong reputation among our stakeholder groups. That reputation is driven by our customer-first approach and the way we innovate from the edge to the core to the cloud. From security to services to software. Helping them get what they need, when they need it, with our financing solutions that are every bit as customized and innovative as our broad technology solutions.
Our success is also about long term value creation. Some of the key levers are:
- Operational— Share gain track record, drive long-term growth and cash flow
- Investments: R&D capability, our sales coverage and marketing investments, M&A activity primarily via VMware
- Structural—Simplifying our structure in two key ways: capital perspective through de-levering and also from a corporate structure perspective
The result is value creation through the financial and market performance of our operating units. We want to grow revenue faster than both our competitors and our markets, grow operating income and earnings per share faster than revenue and deliver solid cash flow growth over time. That’s it. Value, to us, is all about creating long-term, sustainable growth for the benefit of all of our stakeholders. Which leads to a strong reputation.
I’m proud of the culture we’ve created for team members so they can do their best work every day on behalf of our customers. And there’s also the impact of the value we create. We’re not just doing it one dollar at a time.
Instead, we’re building on the foundation of our purpose and making the connection that driving human progress extends to all we do. We build our reputation every day by what we say, what we do and how we do it, and there isn’t a single day we take for granted the trust our stakeholders have placed in us.